Thursday, May 27, 2010

Commercial Real Estate

Most over valued region in San Francisco gets a taste of the commercial real estate bust. $3 trillion in loans starting to implode at a faster rate. Why commercial real estate will plunge FDIC insured banks into closure. Bought for $415,000 per apartment unit.

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Can you imagine? Buying a property for almost $1 billion, that makes no common sense, on the hope that in the future it will go higher in value. And banks were giving these loans.

Banks should have to be viable like any other business. If they give bad loans, they should pay the price. Take away government insurance for depositors. That only allows the banks to take on unnecessary risk.

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